The Cost of Renewable Power: A Survey of Recent Estimates - Green Energy and Efficiency: An Economic Perspective - page 256

rate. Some further reductions in BoS costs can be expected as deployment continues
and economies of scale come into play, but they are far more dependent on local
conditions and not so exposed to competition forces. But even so, there is another
crucial aspect that can and will come into play: technology improvements already
achieved at R&D departments, some of which are almost ready for market
deployment. Indeed, cell ef ciency in commercial systems is close to 20 % in the

best cases, but several research teams have announced increases to 40 % or more.
And for one type of cell, the Concentrated Power PV, ef

ciency might reach close
to 90 % [ 22 ]. This last development is not expected to be available on the market
soon, but it is a clear indication that the LCOE of the PV power might decrease
fourfold in the near future.
If all these trends continue, PV solar can be expected to become the most cost
effective of all renewable technologies, and indeed of all energy sources of any kind,
including fossil fuels. At sites with suf cient direct or even diffuse solar irradiance, it

is set to become the dominant power source: not just another form of energy, but
' energy as some authors put it several decades ago and have reminded us lately

[ 37 ]. However, one dif

the '

culty remains with it: storage to make up for its variability.
But this can be solved by the joint development of other renewable technologies
such as wind, hydro power with storage, biomass and CSP with TES in utility scale
installations. There is currently not much research ongoing on this topic, but it could
bring about a further revolution in solar PV applicability. The learning rates given for
PV technology costs and the ef

ciency improvements achieved apply equally to both
c-Si and CdTe cells, and since the latter are especially suitable for many building
applications, increasing BIPV applications can also be expected.
Sometimes it is also argued that another general push to cost reduction across the
board might come from emerging economies, mainly China and India, where total
costs for all technologies are generally lower than in more advanced countries. But
that has to be balanced against the permanently depreciated exchange rate of the
Chinese currency, which implies lower international prices for their products and
thus increased exports. Moreover, general labour costs are very low compared to
European and other developed nations, but that is also likely to change as middle
classes achieve acceptable welfare levels.
Summing up, signi cant cost reductions in CSP and wind technologies can be

expected, along with quite marked decreases in costs and increases in ef ciency in PV

systems. The remaining technologies — hydro power, biomass and geothermal — are

already mature and competitive, and no signi cant changes are to be expected in

them. Table 3 offers projections for capital costs and the LCOE in 2,020 of renewable
technologies that have not yet achievedmaturity but are expected to do so sometime in
the near future. It is of interest to note that in some cases -notably PV- reality has
already outdone these forecasts. This has happened quite frequently in recent expe-
rience with rapidly evolving technologies, as is the case with renewables [ 31 ].
Although this is the likely outcome, risks remain in the outlook for competi-
tiveness of renewables because the price of some commodities such as cement and
steel, which serve as raw inputs for wind turbines, may increase, and the price of
fossil fuels may fall. However, as noted above, this last development is unlikely in